Illinois – Local sales tax sourcing emergency regulations adopted in response to Hartney decision


Update (03/10/2014): Due to an inadvertent error, the proposed rules related to local sales tax sourcing are being withdrawn and new rules are being proposed. The Department filed the new proposed rules (as well as a Notice of Withdrawal for the current proposed rules) on March 10, 2014 with the Secretary of State. These items are expected to be published in the Illinois Register on Friday, March 21, 2014. The previously scheduled public hearing will be held on March 21, 2014, as originally announced. Please note that this does not affect the emergency regulations, which will continue until expiration of the 150-day period.

The new proposed rules differ in one important respect from the current emergency rules. The new proposed rules do not contain the subsection titled “Long Term or Blanket Contracts,” which is currently found in the emergency rules. In other respects, the new proposed rules are substantively identical to the emergency rules.


The Illinois Department of Revenue (Department) filed emergency regulations on January 22, 2014, with the Joint Committee on Administrative Rules. The regulations reflect guidance provided in the Illinois Supreme Court’s decision in Hartney Fuel Oil Co v. Hamer and provide direction to Illinois taxpayers as to how sales should be sourced for local sales tax purposes.

As drafted, the regulations are to be effective immediately. Affected taxpayers should review the implications of the state’s interpretation regarding how to source retail sales. The fact-intensive inquiry may alter the local sourcing of sales for certain taxpayers.

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